Cheap food slows inflation, eases fuel, airtime tax burden

A litre of petrol retailed at Sh116.48 last month, down from Sh117.54 in September and higher than Sh101 in October last year. Photo credit: Daily nation.

Drop in food prices marginally cut Kenya’s inflation to 5.53 percent in October, easing pressure on households after high fuel taxes pushed the cost of living measure to a 12-month high in September.

The Kenya National Bureau of Statistics (KNBS) data shows that prices of nearly all basic food items including the staple maize flour, sugar and vegetables fell in October, reducing the impact of increased fuel and airtime expenses.

Inflation rose to its highest rate in nearly a year in September to 5.7 percent, the statistics office said on Friday, reflecting the impact of a new value added tax on fuel of eight percent.

“Between September and October, food and non-alcoholic drinks index declined by 1.76 percent…even though year-on-year food inflation was 0.52 percent in October,” said KNBS director-general Zachary Mwangi.

“The decrease was mainly due to lower prices of maize and maize products compared to the previous month.”

Inflation has remained within the government’s preferred band of 2.5-7.5 percent despite the pressure from the new tax.